Qualcomm: How big a deal is it to San Diego?

Here’s a riddle to ponder: What do your smartphone, robotic floor cleaners, sixth graders, and the tomb of Genghis Khan have in common?

No, it’s not a trick question. The answer is Qualcomm.

While the homegrown technology colossus is widely recognized for its chips that power smartphones and its name that, until recently, was affixed to San Diego’s football stadium, its influence and reach in the county is far deeper — albeit less well known.

Its voracious appetite for innovation and research has spawned groundbreaking projects in robotics, driverless cars and crowd-sourcing technology at UC San Diego, as well as a laboratory that has inspired thousands of middle school students to consider careers in science, technology and engineering.

Tech startups, from virtual reality applications to mobile health, have benefited and flourished from Qualcomm’s largesse. And the company’s philanthropy and that of its co-founder, Irwin Jacobs, and wife Joan has percolated into arts and culture, from the San Diego Symphony to the Museum of Contemporary Art and the La Jolla Playhouse.

As Qualcomm prepares for what many expect will be a bruising battle over Broadcom’s $103 billion takeover offer, civic, business and academic leaders worry that a sale could diminish Qualcomm’s economic impact in the region and San Diego’s cachet as home to a well regarded Fortune 500 company that employs nearly 34,000 worldwide and more than 13,000 locally.

Some estimates characterize the company’s economic output as the equivalent of 4 percent of the county’s gross domestic product.

While it is still too early to surmise what would become of Qualcomm’s presence in San Diego and the size of its workforce should Broadcom prevail, the fear of a downsized company is a concern, say many.

“Between their employment base and the companies they’ve spun off, they’ve had a huge economic impact on San Diego,” said Jack McGrory, a former San Diego city manager, real estate investor and chairman of San Diego State’s fundraising arm. “Qualcomm has made people in San Diego millions of dollars who in turn have given a lot of money back to the community and have set up foundations that provide core support for the arts.

“It has become a huge part of the fabric of the city and to lose them and the Chargers in a period of a couple of years would be a huge dent.”

Academics and researchers at UC San Diego also have good reason to fret, given the more than $50 million Qualcomm and its various entities have contributed to the university over the years, from the Jacobs School of Engineering and Qualcomm Institute to the Rady School of Management.

And just this week, the university received a $30 million gift from Qualcomm co-founder Franklin Antonio to expand UCSD’s huge engineering school.

Ramesh Rao, head of Qualcomm Institute (formerly known as the California Institute for Telecommunications and Information Technology), likes to tell the story of UCSD scientist Albert Lin who in 2009 put to use advanced technologies in satellite imagery and crowd-sourcing in his quest to locate the 800-year-old lost tomb of Genghis Khan in Mongolia.

Qualcomm’s funding of the institute helped underwrite some of the costs of that research, which later gave rise to a new startup, Tomnod a crowdsourcing technology firm. Within a year, it was purchased by a satellite company.

“Usually companies are focused on the bottom line when they provide support but Qualcomm has made funding available for us to pursue projects before you even know if there is a market for it., so the feeling that the name could go away is very distressing,” said Rao. “They assemble some of the best minds from around the world at Qualcomm, so I hope that is not the end of an era.

“I have to say, honestly, this is the thought that runs through many people’s minds here.”

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San Diego County largest employers

1. Active duty military and DoD civilian employees: 121,000

2. Government (except public education): 120,200

3. Public school districts: 66,800

4. University of California San Diego: 30,000

5. Sharp Healthcare: 17,800

6. Scripps Health: 14,600

7. Qualcomm: 13,000

8. Kaiser Permanente: 7,500

9. UC San Diego Health: 7,300

10. Rady Hospital: 5,100

Source: Kelly Cunningham, economist

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With a local payroll of 13,000 and the ripple effect of spending by those thousands of employees, Qualcomm has proven to be an economic powerhouse, contributing $7.4 billion to the local economy, said San Diego economist Kelly Cunningham, a principal with the newly formed San Diego Institute for Economic Research.

Just one of two Fortune 500 companies in the county and the seventh largest employer, Qualcomm is also known for compensating its workers well — an average that is well over $100,000 a year, says Cunningham.

“Qualcomm puts San Diego in the big leagues, it’s a player in the tech community and on the world stage, and if Qualcomm isn’t headquartered in San Diego, we lose that,” said Cunningham, whose former employer, the National University System Institute for Policy Research, five years ago helped guide a study of Qualcomm’s economic contributions. “On the one hand, it could become a more powerful company if bought out and employees would have more money to spend, but usually when a company is taken over, you see job cuts.”

Also highlighted in the 2012 study was the breadth of Qualcomm’s philanthropy, including that of its employees. Fast forwarding to today, the company, along with its foundation, have made more than $300 million in cash donations since 2000, supporting everything from Fleet Week activities and science and math education programs aboard the USS Midway to the San Diego Foundation.

On top of that, Qualcomm employees have given to more than 900 local organizations for a total of $22 million over the last four years, thanks to a generous company match program.

“What’s always impressed me the most are those stats you don’t hear about, like the hours of volunteer time their employees are contributing throughout the county,” said Mark Cafferty, CEO of the San Diego Regional Economic Development Corp., which commissioned the 2012 study, along with the San Diego Workforce Partnership. “There’s just a culture at that company that’s become so significant and synonymous with San Diego.

“While consumers may not recognize their name on a national or world stage like they recognize Facebook or Google, when we’re dealing with global economic leaders about where innovative technology is going, all those conversations draw Qualcomm in — and they’re respected.”

Qualcomm also is akin to a giant venture capitalist, nurturing ideas and nascent companies via its corporate investment arm, Qualcomm Ventures, which currently has 140 companies in its portfolio. To date, it has invested $1 billion in multiple sectors within the innovation economy.

One of those success stories is Brain Corp., the maker of self-driving technology used in supermarket floor-cleaning robots. Earlier this year it raised $114 million in a third round of venture capital funding led by SoftBank Vision Fund in a deal that represented the largest single amount of venture money raised by a San Diego start-up in 2017 Softbank is the same company that is angling to buy a stake in Uber.

It’s unlikely that a business like Brain Corp., which began life inside Qualcomm Ventures, would have existed were it not for Qualcomm’s financial backing, said Phil Duffy, vice president of marketing for Brain Corp.

“Not only did they fund us but their desire to examine the neuromorphic space to find the next step in commuting was what sparked the company,” Duffy said. “When we first started, we were a small research firm of 25 neuroscience Ph.D’s and now this year we’re at 100 paid people.”

Beyond the financial rewards delivered by Qualcomm, there are also the incalculable benefits that educators like Vista middle school principal Eric Chagala value most. Students at his Innovation and Design Academy are among the more than 13,300 students in the county who over the last three years have passed through Qualcomm’s Thinkabit lab program, which exposes them to a possible career in the STEM (science, technology, engineering and math) field.

“Hands down, going to the Thinkabit lab at Qualcomm is the most important thing we do for our kids each year,” Chagala said. “They get a unique exposure to the world of work and how computer programming can be used to make things in the physical world actually happen.

“We had one kid who told me as we were getting ready to leave the lab that his teachers in his school have always talked about it being important to go to college and now he understands why. He would be the first in his generation to go to college. You cannot put a dollar amount on what they are doing.”

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